Settlement Presented In Pension Case; May 18 Deadline For Implementation

Apr 2, 2015

A Superior Court judge has set a timeline to move forward with a settlement in the court case over the state pension overhaul.

NEARI executive director Robert Walsh talks with reporters regarding the proposed settlement.
Credit John Bender / RIPR

The agreement still needs approval from the General Assembly, and it would not completely end the long-running legal dispute. The deal would cost taxpayers roughly $32 million more each year to pay for pension costs, while preserving, according to Governor Gina Raimondo, about 90 percent of the savings from the pension overhaul she spearheaded in 2011.

The special master in the pension case, former State Supreme Court Chief Justice Frank Williams, says about 60,000 active and retired public employees will be covered by the settlement. Williams says about 800 police officers and firefighters did not agree, so a court challenge by these two smaller groups may move forward.

Williams delivered his report in court to the Superior Court judge who has presided over the pension case, Sarah Taft-Carter, but he declined to speak with reporters outside of court.

The state sweetened a prior settlement offer with more frequent cost of living increases for pensioners and a minor decrease in retirement ages.

Raimondo praised the settlement.

"This proposed settlement is an important step toward providing certainty for our public employees and our cities and towns, and I believe it is in the best interest of all Rhode Islanders. The proposal keeps our state on a path toward financial stability," she said,

"While the state has a strong case, the uncertainty of a trial threatened to reverse that progress," Raimondo continued. "I am grateful the parties were able to come to an agreement. I look forward to working with the General Treasurer, the General Assembly, and all stakeholders to pass this legislation and then build on this progress by passing a balanced budget focused on creating jobs."  

Taft-Carter set May 18 as the deadline to implement the settlement.

In a statement, House Speaker Nicholas Mattiello praised the settlement, although he said he has not yet had a chance to review the specifics.

“I am pleased that the parties reached a settlement that I believe is in the best interests of the state, its citizens, the retirees and employees," Mattiello said. "I am aware of the general terms of the settlement and I believe they are in the best interests of all, but I haven’t had the opportunity to review the specifics and I reserve the right to do so.  The House of Representatives will conduct its due diligence as part of the legislative process and we have established no timetable at this point.”

Senate President Teresa Paiva Weed praised the settlement and said the Senate plans to review the details.

Union leaders are responding to a proposed settlement agreement. Robert Walsh, executive director of the National Education Association Rhode Island, one of the state’s two teachers unions, said his members do not take the settlement lightly.

“This is a big deal, this is a painful series of cuts, and I do not want to underestimate that or the impact it had on our folks," Walsh said. "The vote, while it was overwhelming, it was done with a heavy heart."

He said he did not think unions would prevail in their court challenge to the pension overhaul.

“Most folks agree that the state was going to be able to prove that a pension system that was 40 percent funded was insufficient for the long term needs of the members of that system," Walsh said.

He added that the deal, at that stage was as good as could be hoped for.

“We believe this is the best we can do, and we believe that this is the best that we could have done, even at the end of a series of court proceeding.  And we believe the settlement looks like the ultimate victory scenario," said Walsh.

Cranston Mayor Allan Fung expressed disappointment about the pension settlement. Fung said he’s concerned that Cranston taxpayers may incur big legal costs to defend against the legal challenges from public safety unions outside the settlement.

The Cranston mayor says a secondary concern is further increases in pension costs for municipal employees and teachers who are included in the settlement. Fung was the Republican gubernatorial candidate last year against the architect of Rhode Island’s 2011 pension overhaul, Governor Raimondo.

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